Global crude oil prices is gradually moving towards reaching the $80 per barrel mark, as Brent hits $78.18, while Nigeria’s Bonny Light was sold at $77.54 per barrel during late trading hours on Monday.

At Nigeria’s current crude oil production of two million barrels per day, the country earns estimated $155.080 million (N55.828 billion) at the current exchange rate of N360/$1.

Current prices are far higher than the United States Energy Information Administration (EIA’s) May Short-Term Energy Outlook forecasts, which put Brent crude oil price at an average of $71 per barrel in 2018, $7 per barrel higher than last month’s forecast.

The current oil price is also higher than the World Bank’s projected average of $65barrel this year, up from last year’s average of $53/barrel.

However, EIA expects West Texas Intermediate (WTI) crude oil price to average $5/barrel lower than the Brent price this year.

The agency estimates that global oil inventories fell an average of nearly 0.6 million barrels per day (bpd) in each of the past five quarters (January 2017 through March 2018).

Oil inventories for countries within the Organisation for Economic Cooperation and Development (OECD), at the end of April, were estimated three per cent lower than the previous five-year average (2013–2017), in terms of days of supply, the largest percentage below the five-year average since March 2014.

In April, when EIA developed the May short term energy outlook (STEO0, many geopolitical risks presented sources of uncertainty.

These risks, including the re-imposition of oil sanctions against Iran, and the upcoming results of May elections in Venezuela, may materialise into actions that remove oil supplies from the global market, and in turn, tighten global oil balances.

At the same time, global liquid fuels consumption is quickly increasing. EIA estimates global oil consumption-weighted gross domestic product (GDP) growth for 2018 will be at its highest rate since 2012.

Greater GDP growth has the potential to increase oil consumption beyond forecasted levels, which could put upward pressure on crude oil prices, and simultaneously drive systemic market movements in equities, bonds, and other commodities, which are often correlated with movements in crude oil prices.

The Secretary-General, Organisation of the Petroleum Exporting Countries (OPEC), Mohammed Barkindo, attributed the rising oil prices to efforts by OPEC and non-OPEC countries to rebalance the market through production freeze.

Barkindo said the participating countries have demonstrated unwavering dedication to achieving the rebalancing of the global oil market, as demonstrated by the high conformity level of 149 per cent.

He said their collective efforts continue to yield positive results, with market fundamentals being solid. “Organisation for Economic Co-operation and Development (OECD) commercial stock levels have been adjusted from a peak of 3.12 billion barrels in July 2016 to 2.83 billion barrels in March 2018, corresponding to a drop of 300 million barrels.”